Washington (June 6) –
A report released today by U.S. Senator Ron Wyden (D-Ore.) criticizes
the National Institutes of Health for failing to insist on affordability
or to negotiate adequate returns on a $183 million taxpayer investment
in the blockbuster cancer drug Taxol. In the case of Taxol, which
by 2001 had become the best-selling cancer drug in history, NIH
failed to require evidence of affordable pricing from the drug’s
private-sector manufacturer and settled for one-half of one percent
return in the form of royalties. The report asserts that NIH had,
but did not use, existing authority to strike better agreements
with drug manufacturers on behalf of both taxpayers and cancer patients.
The report being released today, “Technology
Transfer: NIH-Private Sector Partnership in the Development of Taxol,”
was compiled at Wyden’s request by the General Accounting
Office (GAO). It notes that American taxpayers funded the survey
that discovered the drug and five of the six clinical trials that
brought it to market, and calculates that by the time NIH struck
licensing and royalty agreements in 1996, more than a billion dollars
of Taxol had been sold in just three years.
“It had to be apparent during negotiations
that Taxol was going to be a huge seller, yet NIH failed to get
an agreement that recognized what a vital investment the taxpayers
had made,” said Wyden. “NIH dropped the ball –
or didn’t even realize it had the ball – when it came
to protecting the American people.”
The report states on page 13 that “the
1991 CRADA [cooperative research and development agreement] noted
NIH’s concern that Taxol be fairly priced given the government
investment in Taxol research and the health needs of the public,
but it did not require that reasonable evidence be presented to
show that this had occurred.” Wyden has faulted NIH for failing
to realize that the accessibility of drugs, a stated priority of
NIH in transferring technology to the private sector, is only assured
if NIH leverages its authority to make the drugs affordable.
“Moms with ovarian cancer and AIDS patients
with skin cancer, paying $1,000 a dose for Taxol, needed NIH to
negotiate for them,” Wyden said. “Having the drug on
the shelf doesn’t mean anything if you can’t pay for
it. But this report shows NIH did not do all it could to advocate
for patients.”
In its response to the GAO report, NIH said
it did ask for evidence that Taxol would be reasonably priced, even
though their agreement with BMS did not require it. One of the criteria
NIH cited as acceptable evidence of Taxol’s
reasonable pricing was the discount government
programs would receive through the standard fee schedule for pharmaceuticals.
However, NIH apparently failed to take into account that Medicare,
which would become the primary government purchaser of Taxol, does
not participate in the fee schedule. According to the report, “in
the fourth quarter of 2002, Medicare paid 6.6 times the price …
other Federal programs paid for Taxol, while it paid an average
of 3.0 times the price … other Federal programs paid for other
widely used cancer drugs.” The report says that “the
Federal government has been a major payer for Taxol, primarily through
Medicare … Medicare payments for Taxol totaled $687 million
from 1994 through 1999.”
“I can’t be sure whether NIH doesn’t
know or forgot that Medicare isn’t on the fee schedule. But
either way, it’s an extremely costly oversight,” said
Wyden. “Now, because NIH didn’t use its power to get
a better deal for taxpayers and patients, Medicare has paid more
than a half-billion taxpayer dollars to buy a taxpayer-funded drug
for the taxpayers who funded it”
The GAO also found that “although NIH
estimates that it has invested heavily in research related to paclitaxel
[the key compound in Taxol], its financial benefits from the collaboration
with Bristol-Myers-Squibb (BMS) have not been great in comparison
to BMS’s revenue from the drug.” According to the report
[see page 13], NIH estimates a Federal investment of $183 million
during the time of its initial research and development agreements
with BMS; the only revenues or returns reported total approximately
$143 million. This includes a $16 million offset for the largely
taxpayer-funded clinical trials, $35 million in royalties from Taxol
sales, and an estimated $92 million in paclitaxel provided to NIH
by BMS so government researchers could carry out additional research
needed before BMS could bring the drug to market.
“This report proves that NIH does
not understand that as part of its mandate to get drugs to market
quickly, it must effectively move to make sure that patients can
afford those products – and that they should also work to
get taxpayers get a square deal for their investment,” Wyden
said.
Taxol, is primarily used to treat advanced
ovarian and breast cancer, certain lung cancers and AIDS-related
Kaposi’s sarcoma. Taxol was originally discovered and derived
from the Pacific yew, a tree native to the Northwest U.S. Wyden
worked in the early 1990s to stop the waste of Pacific yew bark,
at the time the only source for the anti-cancer compound, and to
begin ensuring a return on Americans’ considerable financial
investment in the development of the Taxol drug.
Wyden committed today to re-orienting
NIH’s technology transfer focus toward affordability and accessibility
of taxpayer-funded inventions, and called for improvements in the
technology transfer process. He said he believes that NIH has the
authority under existing law to make necessary changes, but that
if NIH fails to act he will not rule out legislative solutions to
the issues detailed in the report.
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